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This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

It once made sense to run data center consolidation programs that were solely focused on virtualization. That time is over. To really reduce IT costs, data center consolidation means moving most applications to the cloud, and virtualizing only those that are better run in-house. If you only think about virtualization when you think of consolidation, you will miss opportunities to save.

The vast majority of enterprise applications can be virtualized, but the problem is virtualization is focused on reducing capital expenses (Capex). This approach can only take you so far, and should be reserved for applications like Oracle and SAP ERP systems, financial systems, and mainframe applications that are more difficult to move to the cloud.

But most applications that can be virtualized can also live in the cloud, meaning even greater opportunities for savings. The real determinant of cloud readiness comes from the way in which the application achieves fault-tolerance. If the application is dependent on the underlying hardware to be fault-tolerant, it is not a good fit for cloud computing. If the application is built to be fault-tolerant aside from the underlying hardware (that is, it is built to be distributed to protect against hardware failure), it can move to the cloud.

Additionally, any application that can be delivered in-house as a service or is Web-based can also start saving you money if you move it to the cloud. That includes popular applications such as SharePoint and many Web-based applications. There is no reason to consume precious internal infrastructure when there is a more flexible option in the cloud. For large enterprises, SharePoint can be better deployed in a private cloud than in a multi-tenant cloud more suited to smaller, noncustomized deployments.

Dangers of Cloud Avoidance

The fears of cloud first-timers are understandable. Many organizations have a death-grip on their applications and equipment because it's been drilled into our heads that security is job one. But there are also risks from avoiding the cloud, including:

* Lock-in. Without the flexibility of cloud-delivered applications, your organization might be locked into a rigid software/hardware stack that will be difficult to change. The new versions of commercial software might not run on your legacy hardware. And new applications you build in-house might not be able to accommodate new demands if they're running on old hardware. Why are you paying utility bills for your data center and support contracts to run that hardware if it can't meet your business needs? Why not move Capex to Opex (operational expenditure) where you can?

* Missing Out on the Cloud Brain Trust. When you move your applications to the cloud, you don't just save money and management hassle. You also get the benefits of the expertise of cloud service providers, people whose sole job it is to run data centers and support applications, day in and day out. That means relief from the daily grind of patches and upgrades, but it also means a window into an exciting future. Work with a service provider with the expertise to teach you how to leverage the latest technologies in a way that enhances your competitive advantage.

* The Scalability Ceiling. Even if you virtualize your application and run it in your own data center, you'll save space but have limited scalability. That could be a significant problem if you run an online store and suddenly an item becomes popular. In the cloud, you can "burst" into practically limitless capacity, and then scale back down when you no longer need it. A large insurance company customer pursued this strategy when it had a big hiring event; the company spun up dozens of servers to support the event, and then spun them down again. Amusement-park operator Six Flags uses the cloud to manage huge traffic bursts in online ticketing during the peak summer season. Neither company could do this without the cloud.

* Lack of Self-Service. Virtualization is complex and requires a high degree of centralized control, which means business users can't just "virtualize at will" and provision their own resources. But in the cloud, they can, and that saves IT time and money while empowering the business.

* Remaining in the Infrastructure Business. Although virtualization provides cost savings, it still obligates your enterprise to remain in the infrastructure business. IT still has to acquire, manage and replace that hardware, as well as apportion servers, administer change requests, and apply patches and upgrades. In the cloud, IT is freed of that responsibility and can focus instead on new, innovative applications and technology that make the business more competitive. New applications can be developed using newer techniques, like DevOps. The cloud provides the flexible infrastructure you need to support that Agile approach to application development.

For most applications, virtualization is not the answer. You're still running the same infrastructure stack, albeit on less infrastructure. To truly say "yes" to a flexible infrastructure that makes way for innovation, your organization needs to take the leap and move to the cloud.

Jawalka works for Rackspace Advisory Services as an Enterprise Solutions Architect for Cloud Strategy. He is a technology industry expert with 10 years experience in developing world-class product and transformational architectures. Rackspace Advisory Services provides fanatical support during strategic IT planning processes and works with organizations to strategically craft plans that take advantage of the increased agility, scalability and cost savings of cloud computing. For more information, visit: http://www.rackspace.com/enterprise_hosting/advisory_services/